By Dylan Emery The Isle of Man is preparing to pass legislation to ease the use of electronic commerc...
The Isle of Man is preparing to pass legislation to ease the use of electronic commerce, which is increasingly being used in international banking and investment.
The Electronic Transactions Bill, which should be made law by the end of the year, is based on a draft Australian e-commerce bill and has two basic elements.
Firstly, it puts electronic commerce on the same legal footing as paper commerce, and secondly, it tries to remove potential legal problems when communicating electronically.
The aim of the bill is to allow people to carry out their legal obligations using a wide variety of electronic media. This is done through two principles.
The principle of 'technology neutrality' means that the law should not discriminate against any particular form of communication. 'Media neutrality' means that transactions carried out electronically should be treated as equal to those carried out on paper.
The draft bill was put on the Isle of Man government's website and the Department of Trade and Industry invited suggestions and commentary.
Submissions were allowed until the 3 September, whereupon the bill was finalised and is now to be presented to the Tynwald (the island's parliament), hopefully before the new year.
An example of the bill's effect is that, after it is passed, a court could not declare a contract invalid on the grounds that it had been negotiated via e-mail or fax. It might be invalid for other reasons, of course, but not because of the medium used.
Certain sorts of contracts can be explicitly excluded from this law by the regulatory authority - the Department of Trade and Industry - who are sponsoring the bill.
The bill also covers the sending of messages, which may have legal implications, over the internet. In general, a message is counted as 'received' when it reaches the receiver's internet service provider, as long as the sender told the receiver it was being sent. This prevents people avoiding legally receiving a communication by not opening their e-mail.
For an electronic communication to legally 'count', the receiver must have given their permission to have the information delivered to them in that particular form. This permission can be implied, for example by giving an e-mail address to somebody. For the case of contracts requiring a signature, the bill allows any electronic method to be used, as long as it has the same effect as a signature is supposed to have.
The 'signature' must identify the person concerned and show they approve of its contents. It must be suitably reliable, however there are no specific requirements, for example, as to the level of cryptography - that will be decided by the courts on a case-by-case basis.
Public authorities have the right to demand certain technical specifications for digital signatures they receive. Non-public authorities must be shown to have agreed to receive the digital signature in the form that it arrived.
Exceptions to the general rule about paper and electronic equivalence are courts and tribunals, which will generally continue to require hard copies of evidence. The bill does not attempt to explicitly address issues such as crime prevention and security on the grounds that they are currently a matter for international discussion. The government's intention is to introduce further legislation at a later date, if necessary.
David North, minister for trade and industry, said: "The department is seeking to adopt a minimalist approach to legislation so as to differentiate e-commerce as little as possible from more traditional forms of commerce.
"It is, nevertheless, an important first step in demonstrating the Isle of Man's commitment to establish an environment in which e-commerce is allowed to flourish."
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